Under what conditions can Itan terminate the agreement with a franchisee, effective immediately upon notice?
Itan Franchise · 2025 FDDAnswer from 2025 FDD Document
hase, or at our option, the representations and warranties contained in the offer. If we do not exercise our right of first refusal, you or the Owner, as applicable, may complete the Transfer to the purchaser pursuant to the terms of the offer, subject to the requirements of §8.2, including our approval of the transferee. If the sale is not completed within 120 days after we receive the offer, or there is a material change to the terms of sale, we will again have the right of first refusal specified in this Section. Our right of first refusal shall not apply to a Permitted Transfer.
9. TERMINATION
- 9.1. By Us. We may terminate this Agreement, effective upon delivery of a notice of termination, for any of the following reasons, all of which constitute material events of default and "good cause" for termination, and without opportunity to cure except for any cure period expressly set forth below:
- (i) if we terminate any Definitive Agreement due to a default committed by you or one of your Owners or affiliates;
Source: Item 23 — RECEIPT (FDD pages 44–190)
What This Means (2025 FDD)
According to Itan's 2025 Franchise Disclosure Document, Itan can terminate the franchise agreement with a franchisee immediately upon delivering a termination notice under specific circumstances. These circumstances are considered material defaults and "good cause" for termination, and generally do not offer an opportunity for the franchisee to cure the default.
Itan can terminate the agreement immediately if they terminate any Definitive Agreement due to a default committed by the franchisee, one of their Owners, or affiliates. Additionally, immediate termination is possible if the lease for the franchisee's premises is terminated due to the franchisee's default. Itan can also terminate immediately if they (or their affiliate) terminate any Definitive Agreement, other than an area development agreement, due to a default committed by the franchisee (or their affiliate or an Owner).
It is important to note that if Itan sends the franchisee three or more default notices within a 12-month period, even if the franchisee cures each default, Itan still has grounds for immediate termination. However, if the franchisee (or an Owner) breaches any other provision of the Agreement, including any mandatory provision in the Manual, and fails to cure within 30 days after receipt of a default notice, this does not result in immediate termination; the franchisee has an opportunity to cure in this instance. If Itan sends a default notice, they may cease performing their obligations under the agreement until the franchisee cures the breach, unless Itan's failure to perform would materially impair the franchisee's ability to cure.